OCA upholds $700,000 award in internet defamation case

The Ontario Court of Appeal has upheld $700,000 in damages in what lawyers say is an important case for internet defamation law.

In Rutman v. Rabinowitz, two businessmen, Moishe Bergman and Saul Rabinowitz, appealed various parts of an Ontario Superior Court judgment that found they were liable for an internet campaign that had defamed a former businesses associate, Ronald Rutman.

While Rabinowitz admitted liability for the defamatory statements at trial, he appealed the damages awards, arguing they were inordinately high.

Bergman appealed a finding of joint and several liability against him for the defamatory statements.

The Court of Appeal’s decision dismissing the appeals found that the “pernicious effects” of internet defamation distinguishes it from defamation in other mediums when it comes to awarding damages.

Lawyers say the decision to uphold such a large compensatory damages award calls out for specific condemnation for internet defamation.

“It’s a recognition of not only how targeted and malicious the campaign was in this particular case but also the nature of the medium used and how internet defamation — given its immediacy, its permanency and how quickly it spreads — can be a particularly effective form for somebody who really wants to cause damage to someone’s reputation,” says Kevin O’Brien, a partner at Osler Hoskin & Harcourt LLP, who was not involved in the case.

The internet campaign started in 2008 after a dispute concerning control of a business Rutman owned and for which the two defendants worked. The campaign involved anonymous emails Rabinowitz sent to Rutman’s business partners and associates that included defamatory statements he was being investigated for money laundering and tax fraud, according to the decision. Rabinowitz also posted negative reviews about Rutman on an internet bulletin board that described the plaintiff as “a thief” who “deserves to be behind bars.”

The defamatory activities were “unrelenting, insidious and reprehensible” and stretched out over a “lengthy period,” the decision said.

One of the issues in the case from a damages perspective was that the plaintiff had admitted at trial that he was not aware of specific injury to his reputation in the community. The defendants argued that the damages should therefore be on the lower end of the scale.

The Court of Appeal, however, rejected this argument and found that the inability to point to a specific harm is not an acknowledgement that one did not exist. The court also noted that while the traditional factors for determining defamation applied, they have to be examined in the light of the “internet context” where the offending statements could be disseminated widely and viewed instantly by anyone.

“For the most part, you can’t put a dollar number on how your reputation’s been harmed,” says O’Brien.

Matthew Sammon, one of the lawyers representing Rutman in the appeal, says the decision reaffirmed that it isn’t necessary for a plaintiff to prove specific injury to reputation when it comes to assessing damages for internet defamation.

“The whole issue with internet defamation is you don’t know often the scope of the dissemination of that communication,” says Sammon, a partner with Lenczner Slaght Royce Smith Griffin LLP.

“You don’t know who it might have affected, what business you might have lost or who might think differently about you, because you don’t know who has seen the posts.”

Another central issue in the appeal was whether Bergman, who claimed he had no involvement in the defamatory activity, was liable. Bergman argued that join liability in defamation requires either approval or publication of the defamatory statements. Bergman said that while he knew of Rabinowitz’s plan and did nothing to stop it, he was under no duty to do so.

The court upheld the trial judge’s finding that it was not necessary to find Bergman was an active participant in the defamation to find he was liable.

The court found Bergman’s participation in the general plan to defame Rutman, as well as his facilitation of the behaviour, was enough to find him liable, even if he wasn’t involved in the defamatory activity from the very outset.

“Bergman did not simply agree with or acquiesce in Rabinowitz’s campaign,” the Court of Appeal ruling said. “To the contrary, on the trial judge’s factual findings, he was involved in authorizing the use of Artcraft equipment and personnel to facilitate the defamation campaign.”

Sammon says the decision clarifies the law around concerted action liability — a type of vicarious liability in which a defendant is held liable for the actions of another because they were “[k]nowingly assisting, encouraging or merely being present as a conspirator at the commission of the wrong,” according to The Law of Torts by John Fleming, which was cited in the decision.

Sammon adds that the decision defines the law in a way that will be helpful for litigators looking to establish concerted action liability.

“It confirms that, in connection with defamatory activity, you don’t have to directly participate in making the defamatory statements to be liable for them,” says Sammon.

“If the defamatory statements are made pursuant to a common design or plan to benefit the non-participating defendant and he or she is involved in that plan in some fashion, that could be a sufficient connection, depending on the circumstances to render them liable.”

Sammon says the case is helpful in the area of internet defamation as it summarizes and reaffirms a number of trends in the law that had been developing prior to the case.

Lawyer John Adair, who represented Rabinowitz in the appeal, declined to comment on the decision.

Helen Daley, one of the lawyers representing Moishe Bergman and Artcraft Company Inc., did not respond to requests for comment.

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